By Shuli Ren

Citi analyst Bin Liu disagrees and urges investors to buy Qihoo as its share price weakens after the news. Qihoo is down 5.5% mid-day:

We believe Qihoo has strong search product development expertise and a market leading browser/directory page to cross-sell its search service, and will continue to gain share from competitors.

We don’t expect such a deal will significantly hurt Qihoo’s growth potential, and view any event-driven share price weakness as good entry opportunity for investors.

We expect Qihoo to have 28% search traffic market share by 2014 through organic growth.

Qihoo has over 30% traffic share in Android-based apps stores and the recent 91 Wireless partnership with Baidu has not meaningfully hurt Qihoo’s market position, according to our channel checks.

Citi has a $87 price target for Qihoo, using discounted cash flow analysis. The price target translates into 0.6 times price-to-earnings versus three-year forward growth rate, which is reasonable – if you agree with Citi’s outlook on Qihoo’s revenue growth.

About Emerging Markets Daily

Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing. Countries from Brazil and Russia to Turkey face challenges including infrastructure bottlenecks, credit issues and political shifts. Barrons.com’s Emerging Markets Daily blog analyzes news, data and research out of emerging markets beyond Asia to help readers navigate the investment landscape.

Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools. She studies multiple languages and photography.